Aurangabad civic body mulls raising loan to fund project

The civic administration has set its sight on securing a bank loan to fund the drainage project, though it will need to mortgage some of its properties to raise the amount.Niraj Chinchkhede | TNN | May 29, 2017, 13:30 IST

The cash-strapped body needs another Rs 98 crore to enable it complete the much hyped up-gradation of drainage system. As the civic body has been delaying payment of bills of the contractors executing the project, some of them have suspended their work.

The contractors were asking for payments but when the civic authorities assured them that part payment will be released, they resumed the work. The officials are working on a proposal to mortgage some of its properties at prime locations to avail loan from financial institutions.

“Yes, the project cost has gone up by Rs 98 crore. Hence, we are putting efforts to arrange the fund. We may soon seek approval of the general body and then, approach financial institutions. While availing the loan, the civic body may give collateral security of its properties,” civic chief D M Mugalikar told TOI on Saturday.

Mugalikar added that the project cost, earlier estimated at Rs 365 crore, has swelled by Rs 98 crore because of additional work. “At many places, there was no provision for secondary and tertiary drainage lines, but now we have to build it. Apart from this, we had to make modifications in many other places that eventually resulted in escalation of the project cost,” he said.

In 2014, while the civic body was planning to launch public-private partnership model water distribution project, the Aurangabad Municipal Corporation had to mortgage its prime location properties to avail bank loan.

But when the public came to know that the municipal authorities were considering mortgaging land of the Shivaji Maharaj museum for the purpose, they faced strong objections from all corners of the society. Eventually, they had to drop the plan to offer Shivaji Maharaj museum land for mortgage.

Interestingly, the civic body is running short of properties with clear titles that can be offered to the financial institutions in the form of mortgage.

The municipal body is upgrading the existing drainage system under the Centres Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT). The project will take care of city’s drainage system till 2030. It will comprise sewage treatment plants with a total capacity of 222.50 million litres a day and internal network of drainage lines.

The project was launched on August 23, 2014 and it was expected to be completed within three years. Mugalikar said the project would be completed by October 2017.